Buying a home can be a confusing process. This is especially true for first time buyers. All those words! But don't worry, that why you hire a professional to help you figure it all out. Still, there's some basic terms that you should familiarize yourself with, especially when closing a home sale.
 
Here's the 5 most important closing terms you should know.
  1. Down Payment Simply put, this is the amount of money you pay up front for a mortgage, just like buying a car. Most mortgage lenders require between 3% - 20% down payment. In the case of VA or government assisted loans, this amount can be less.
  2. Private Mortgage Insurance (PMI) – You may be required to pay for private mortgage insurance when you take out a loan if you put down less than 20%. PMI protects the lender in case you end up foreclosing on your home.
  3. Annual Percentage Rate (APR) – APR refers to the total cost of taking out a loan. It can include broker fees, interest rate, points, and others.
  4. Loan Estimate (LE) – A loan estimate deals with the estimated closing costs, along with the terms of the loan that you agreed to.
  5. Closing Costs – Closing costs are paid by both the buyer and seller. These costs can cover application fees, property fees, title examination, title insurance, attorney charges and settlement documents.

Of course, this only scratches the surface of what you should know about buying a home. 

Check back on our blog twice a week for more real estate news, ideas, and local events in Austin and Lake Travis. You can search for the perfect home on our website using our powerful home search tools. You can also get free listing alerts of homes as they hit the market at WelcomeToLakeTravis.com. And you can always feel free to call us at 512-657-4467‚Äč to talk to an experienced agent today.